Agence France Presse | June 6, 2003
MIAMI (AFP) - US and and Chilean officials signed the first free trade treaty between the United States and a South American country, seen as a stepping stone toward an America's free trade zone.
The accord was signed by US Trade Representative Richard Zoellick and Chilean Foreign Minister Soledad Alvear at the lavish Villa Vizcaya in Miami.
"That's a very positive development," State department spokesman Richard Boucher said in Washington. "I think it'll be taken up in Congress soon. It's good for both the US and Chile, but it's also good for the hemisphere."
The agreement reduces or eliminates tariffs on everything from goats to baseballs. The list takes up 500 of the document's 800 pages.
Once the agreement comes into effect, tariffs will be lifted on 85 percent of industrial products, while 75 percent of agricultural products will be tariff-free by 2006. Remaining duties will be gradually eliminated by 2014.
Zoellick said at the ceremony that the accord "will encourage nations everywhere" to sign similar pacts, and hailed Chile as "a leader and example for the world."
The pact was sealed after two years of arduous negotiations that concluded in December. Many analysts blamed the delay in signing the document on Washington's disappointment with Santiago's opposition to the Iraq war.
The agreement, which needs to be ratified by the legislatures in both countries, is expected to boost the already strong trade links between Chile and its biggest trading partner.
Goods trade between the United States and Chile totaled 6.4 billion in 2002, with Chile registering a 1.2 billion dollar trade surplus. Trade in services in 2001 amounted to 2.2 billion dollars, with the United States in surplus by 472 million.
US and Chilean officials say the pact should encourage progress at talks on a Free Trade Area of the Americas (FTAA), which the United States wants completed by 2005.
"It's a shot in the arm for the Free Trade Area of the Americas negotiations," Thomas Donohue, chief executive of the US Chamber of Commerce, said in a statement hailing the accord.
Thirty-four governments, representing all countries in the western hemisphere except Cuba, have agreed in theory to work toward the FTAA.
But Brazil's President Inacio Lula da Silva, and his Argentine counterpart Nestor Kirchner, have strong reservations over the proposal, and say the South American Mercosur trade bloc should be consolidated first.
The US Chamber of Commerce urged Congress to move quickly to approve the US-Chile agreement.
"The agreement with Chile will slash trade barriers, protect investors, and ensure the competitiveness of American companies in the global marketplace," Donohue said in a statement.
"To keep our economy growing, we need additional trade agreements to create new opportunities for American businesses and workers," he said.
But the powerful Teamsters trade union harshly criticized the agreement, saying it "will do nothing but further the goal of similar unfair trade agreements by exploiting workers in both countries."
The pact is the first between the United States and a South American country. The US has, in addition to the North American Free Trade Agreement with Canada and Mexico, free-trade pacts with Israel and Jordan and has signed an agreement with Singapore.
Florida Governor Jeb Bush, the US president's brother, also attended the ceremony.Agence France Presse:
